In July it emerged that self-licensed financial planning firm Chambers Investment Planners (CIP) was entering administration, with suggestions professional indemnity insurance issues relating to claims by former clients before the Financial Ombudsman Service sparked the move.

A former CIP client told ifa the advice they received was inappropriate, causing losses of as much as $200,000 – for which he is now seeking redress through FOS and seeking legal advice.

“These guys put me and countless other investors into failed MIS investments, continually referring to them as assets, and taking exorbitant commissions in the process,” the former client said.

“Instead of securing our financial future they have nearly ruined us; I want to see these [people] shut down and never stain the financial services industry again.”

In addition, two separate letters of complaint sent by legal representatives of former clients to CIP managing director George Takla in 2012 – obtained by ifa – allege that the statements of advice received by CIP clients recommended very similar “high risk” investments despite very different personal financial circumstances.

For example, at least two former CIP clients were advised to borrow money to invest in the Willmott Forests Project – an agribusiness investment scheme which collapsed in 2010 – among a number of other failed structured products.

“Investments in agribusiness schemes have a very high level of risk associated with them,” states one of the letters from lawyer David Huggins of Huggins Legal to Mr Takla.

“That derives from multiple sources – they are speculative investments that have a very high incidence of either total or partial failure to meet projected returns.”

Furthermore, both clients were advised to borrow to invest in the Macquarie Geared Equities Investment, a structured product described by the lawyer as representing an “excessive level of risk” for his clients' particular situations.

The documents indicate that a highly similar investment strategy was recommended to both clients despite an income differential of more than $50,000 and quite different family and lifestyle circumstances.

Beyond claims of inappropriate advice, the documents allege the clients had been provided with an “unintelligible” fee disclosure section of the SOA and that fees may have been charged “in breach of legal duty”.

“It would appear that CIP was, in effect, charging my client substantial fee for service and, in addition, receiving commission payments – in circumstances where it was reasonably entitled to charge (receive) one or the other or not both,” Mr Huggins wrote.

In the case of the Willmott project, the lawyer alleges CIP received commissions of 17 per cent and 15 per cent from the two clients’ investments respectively.

“This is an extraordinarily high level of commission (I am not aware of any other financial product that had this level of commission payment associated with it),” the letter states.

Issuing a right of reply, Mr Takla told ifa he was “surprised” by Mr Huggins’ comments, claiming he had never seen the letters and that Mr Huggins, as a legal expert and not a financial planning expert, was not qualified to determine whether the financial advice received was appropriate for his clients.

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“[We] strongly object to Mr Huggins providing his personal opinion about the standard of advice it provided to clients which he describes as very poor advice and we will seek legal advice in that regard,” Mr Takla said.